Greenpeace: Electronics Supply Chain Is Still Dirty

The electronics supply chain is still heavily dependent on carbon-based energy in its manufacturing processes, especially in south East Asia. Companies in the sector should do more to end the use of environmentally damaging power products, according to Greenpeace, which also nominated India's Wipro Ltd. (NYSE: WIT) as No. 1 in commitment to eliminate greenhouse gas.

In its latest and 18th Guide to Greener Electronics report the environmental activist organization slammed electronics companies for failing to reduce the carbon footprint of their manufacturing processes and said the majority of companies in the sector "are still too heavily dependent on dirty energy sources that are contributing to climate change."

Greenpeace commended 16 leading electronic companies for taking actions to cut the presence of toxic chemicals in many of their products, including mobile phones, computers, and tablets. Many of the reduced use of toxic materials observed by Greenpeace, however, were mandated by governments and regulatory bodies in Western nations and include the EU's Restriction of Hazardous Substances in electrical and electronic equipment, otherwise known as RoHS, and the Waste Electrical and Electronic Equipment directive, WEEE. These regulations have strict penalties for companies failing to comply with their terms, including the possible exclusion of such products from the European market.

This marks a clear difference with energy and power regulations. Energy generation is often the preserve of governments and sometimes loosely regulated private companies and electronic companies may not be able to influence the production and distribution processes. They are able, however, to more tightly control or reduce usage at their plants as well as cut the overall carbon footprint of their operations and those of suppliers by installing energy efficient products. Greenpeace believes the biggest electronic companies, because of their size, can also influence governments and energy producers to use fewer pollutants in power generation. It added further in the introduction to the report:

...most companies have yet to meaningfully engage in the political process to create the ambitious action we need to make the greenest electronics and prevent the most devastating climate change impacts. With the right consumer pressure placed on these issues, companies can focus attention on these issues of waste and dirty energy and build on the considerable progress already made in greening the sector, innovating beyond what even we think is possible now and creating an electronics market that is leading the economy toward a greener future.

Greenpeace also released its ranking of the Guide to Greener Electronics, which features top electronic companies that have made efforts to slash greenhouse gas in their manufacturing processes. India's Wipro jumped to the No. 1 position and received high scores for its plan to cut "emissions by 44 percent by 2015 from a base year of 2008" and for setting "a goal of achieving 85 percent of its emissions reduction through renewable energy." The company was making its debut in the international version of Greenpeace's Guide to Greener Electronics for the first time and had previously been in the Indian edition.

Wipro has set a new benchmark for sustainability, not only in India but across the globe, that will have a long-term impact in shaping the green energy debate in the electronics industry. The rest of the electronics sector should follow in the footsteps of Wipro's climate leadership.

Hewlett-Packard Co. (NYSE: HPQ) slipped in the ranking to No. 2 from the premier position in 2011 and is followed in the third slot by Nokia, which had previously claimed the No. 1 slot for three years until it lost the title in 2011. Greenpeace said Nokia "met a renewable energy target of 40 percent, a strong number but still below its original 2010 target of 50 percent," adding "the company falls short in other areas as well, including lacking a robust clean electricity plan, an ambitious greenhouse gas emissions reduction target of 30 percent by 2015, and a renewable energy target of 100 percent by 2020."

With all its current challenges, it is understandable if environmental preservation is not a major concern for Nokia's senior executives.

Making up the Top 10 in the Greenpeace ranking are Wipro, HP, Nokia, Acer, Dell, and Apple, in that order. The remaining companies on the list are Samsung, Sony, Lenovo, and Philips, also in that order.

I wonder how traceable the performance is for the larger companies that use subcons in China. If Greenpeace is tracking everyone in the prodcution flow then the larger companies should be commended for a job well done.

The new government rules and regulations may prove to be a double-edged sword: achieving some positive goals but costing organizations a great amount of money and work and, perhaps, lost sales as well.